Support from a Europe-wide cheap loans scheme that is still on the drawing board offers Portugal a fighting chance of exiting its international bailout successfully, the country’s deputy minister for Europe said on Monday.
Portugal needs to press ahead quickly with another round of painful economic reforms after its international bailout ends in mid-2014, Bruno Macaes told Reuters in an interview.
Proposals for the system of cheap funds as an incentive for such reforms will be on the agenda of Thursday’s European Summit in Brussels, and Macaes said leaders needed to introduce the scheme soon.
“(Portugal’s) structural reforms must be quicker, more incisive, not taking so long as they have so that their effects are felt more quickly,” Macaes said.
“This can only be possible with support from these contractual arrangements: institutional and financial support”.
Under these arrangements, legally binding contracts with economic reform targets and milestones, member states would be assigned funds via grants or cheap loans.
Portugal, which navigated its way out of a deep recession in the second quarter, is fighting to get a grip on public finances as it seeks to become the second euro zone state after Ireland to return to financing itself.
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